Italy’s ESM Refusal Adds Risk Factor, Top EU Officials Warn

Italy’s failure to ratify the European Stability Mechanism bailout fund leaves the bloc with less protection in case of a future banking crisis, top officials warned.

“If the ESM treaty is not ratified it means that the ESM would not be able to play as active a role as it could,” which would be a problem “in case of a banking difficulty,” Paschal Donohoe, who leads the meetings of euro-area finance chiefs, told reporters in Brussels on Monday. “It’s a risk that gets bigger if the treaty isn’t modified.”